The legislative instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Margaret M. Corley.
CONFERENCE COMMITTEE REP ORT DIGEST
SB 418 2020 Regular Session Talbot
Keyword and summary of the bill as proposed by the Conference Committee
LIABILITY INSURANCE. Enacts the Omnibus Premium Reduction Act of 2020. (1/1/21)
Report adopts House amendments to:
1. Limit venue for direction actions brought against the insurer to the parish where the accident
or injury occurred or where an action may be brought against the insured.
2. Remove the repeal of present law relative to the direct action against a foreign insurer.
3. Provide for technical changes
Report rejects House amendments which would have:
1. Apply the proposed $5,000 jury trial threshold to tort actions, only, and lowers the jury trial
threshold for all other actions to $35,000.
2. Remove from the definition of "cost sharing" amounts owed, but not paid, by the plaintiff.
3. Limit the time period for which the court may receive evidence of the amount of insurance
premiums paid.
4. Allow the court to receive evidence concerning the amount the health insurer would have
paid if the claimant had submitted medical bills to the insurer.
5. Remove the right of direct action against the insurer in cases where the insured is insolvent
or service of process cannot be made on the insured.
Report amends the bill to:
1. Apply the proposed $10,000 jury trial threshold to tort actions, only, and lowers the jury trial
threshold for all other actions to $35,000.
2. Limit the time period for which the court may receive evidence of the amount of insurance
premiums paid and applies a 1.5% multiplier to the amount of premiums as an award of damages.
3. Provide for additional rights to direct action:
(a)When the tortfeasor's liability insurer has reserved the right to dispute
whether the policy at issue provides coverage for some or all of the claims
asserted in the action, other than limits of coverage provided by the policy.
(b)When the tortfeasor's liability insurer has denied coverage to the tortfeasor for
some or all of the claims asserted in the action.
(c) The cause of action is for damages as a result of an offense or quasi offense
related to asbestos exposure.
4. Provide that the caption of any suit brought pursuant to the provisions of this Section shall
not include the name of the insurer.
5. Provide for prospective application.
6. Provide for technical changes.
Digest of the bill as proposed by the Conference Committee
Proposed law creates the Omnibus Premium Reduction Act of 2020, which has as its general purpose
the reduction of the cost of motor vehicle insurance by legislation in regard to civil law and insurance
policies.
Present law provides a general one-year liberative prescriptive period for delictual actions (C.C. Art.
3492), and a two-year period for delictual actions for damages arising from an act defined as a crime
of violence, except for any act of sexual assault which is subject to a liberative prescription of three
years. (C.C. Art. 3493.10).
Proposed law increases the general one-year prescriptive period for delictual actions for injury or
damages arising from the operation of any motor vehicle, aircraft, watercraft, or other means of
conveyance to a two-year prescriptive period and retains the liberative prescription of three years for
any act of sexual assault.
Present law (C.C.P. Art. 1732) authorizes a jury trial when the amount in controversy exceeds
$50,000.
Proposed law reduces the threshold for a jury trial to $35,000, except for tort actions, for which the
threshold is $10,000.
Proposed law (R.S. 9:2800.25) provides for definitions: (1)"Health insurance issuer" means a health insurance coverage through a policy or certificate
of insurance subject to regulation of insurance under state law, health maintenance
organization, employer sponsored health plan, the office of group benefits, and an equivalent
federal or state health plan.
(2)"Medical provider" means any health care provider, hospital, ambulance service, or their
heirs or assignees.
(3)"Cost sharing" means copayments, coinsurance, deductibles, and any other amounts which
have been paid or are owed by the plaintiff.
Proposed law provides that when a plaintiff's medical expenses have been paid by a health insurance
company or Medicare, plaintiff's recovery of medical expenses is limited to the amount actually paid
to the health care provider by the insurer or Medicare, and not the amount billed.
Proposed law limits the time period for which the court may receive evidence of the amount of
insurance premiums paid and applies a 1.5% multiplier to the amount of premiums as an award of
damages.
Proposed law further provides that in an action where a person suffers injury, death, or loss, the court
may receive evidence concerning any amount which has been paid or contributed as of the date it
enters judgment, by or on behalf of, the claimant or members of his immediate family to secure his
right to any private insurance benefit which he has received as a result of such injury or death.
Present law (R.S. 22:1269 (B)) provides relative to liability policies and direct action against an
insurer.
Present law provides that an injured third party has the right to take direct legal action against the
insurer if that right is provided for within the terms and limits of the policy. Provides for action
against the insurer alone if at least one of the following applies:
(1)The insured has been adjudged bankrupt by a court of competent jurisdiction or proceedings
to adjudge an insured bankrupt have been commenced before a court of competent
jurisdiction.
(2)The insured is insolvent.
(3)Service of citation or other process cannot be made on the insured.
(4)The cause of action is for damages resulting from an offense or quasi offense between
children and parents or between married persons.
(5)The insurer is an uninsured motorist carrier.
(6)The insured is deceased. Proposed law provides for action against the insurer alone within the terms and limits of the policy
if at least one of the following applies:
(1)The insured has been adjudged bankrupt by a court of competent jurisdiction or proceedings
to adjudge an insured bankrupt have been commenced before a court of competent
jurisdiction.
(2)The insured is insolvent or dissolved.
(3)Service of citation or other process cannot be made on the insured.
(4)The cause of action is for damages resulting from an offense or quasi offense between
children and parents or between married persons.
(5)The plaintiff is seeking recovery pursuant to unisured or underinsured policy.
(5)When the tortfeasor's liability insurer has reserved the right to dispute whether the policy at
issue provides coverage for some or all of the claims asserted in the action, other than limits
of coverage provided by the policy.
(6)When the tortfeasor's liability insurer has denied coverage to the tortfeasor for some or all
of the claims asserted in the action.
(7)The cause of action is for damages as a result of an offense or quasi offense related to
asbestos exposure.
(6)The insured is deceased.
Proposed law provides that in a direct action against the insurer, the insured, and not the insurer,
shall be the named party in the caption.
Present law provides that a direct action may be brought in the parish in which the accident or injury
occurred or in the parish in which the action could be brought against either the insured or the insurer
under the general rules of venue prescribed by present law.
Proposed law provides that the direct action may be brought in the parish in which the accident or
injury occurred or in the parish in which the action could be brought against the insured under the
general rules of venue.
Present law (R.S. 32:295.1(E)) provides that the failure to wear a safety belt in violation of present
law shall not be admitted to mitigate damages in any action to recover damages arising out of the
ownership, common maintenance, or operation of motor vehicle, and the failure to wear a safety belt
in violation of present law shall not be considered evidence of comparative negligence.
Proposed law repeals this provision. Proposed law provides that pursuant to its provisions every motor vehicle insurer authorized to
transact business in the state shall make a motor vehicle policy rate filing with the Dept. of Insurance
at least once every 12 months for the 36-month period following the effective date of the proposed
law and shall reduce rates when actuarially justified.
Proposed law further provides that for policies of automobile insurance issued or renewed one year
following the effective date of the proposed law, each insurer shall file with the commissioner of
insurance for approval premium rates which actuarially reflect the savings it anticipates as a result
of the proposed law, which is presumed to be 10% lower for each impacted coverage, when
compared to the premium rates in effect for that coverage on the date of enactment of the proposed
law. Also provides that each such insurer shall have the right to request all or partial relief from the
presumed roll-back amount of 10% on each impacted coverage, if it can demonstrate to the
commissioner of insurance that it has not experienced a sufficient reduction in loss costs to
actuarially justify the full amount of presumed savings of 10%.
Proposed law further provides that any filing with premium rates that provide for the 10% reduction
or more for each impacted coverage shall be deemed approved, if not disapproved, 30 days after
filing. Proposed law also provides that it does not prohibit an increase for any individual insurance
policy premium if the increase results from an increase in the risk of loss.
Proposed law provides that the provisions of proposed law shall become effective on January 1,
2021, and shall have prospective application only and shall not apply to a cause of action arising or
action pending prior to January 1, 2021.
(Amends C.C. Arts. 3492 and 3493.10, C.C.P. Art. 1732, and R.S. 22:1269(B); enacts R.S.
9:2800.25; repeals R.S. 22:295.1(E))